The need for multi-factor authentication in electronic transactions and other access control systems is increasing. Identity theft, and other threats increase with growing use of e-commerce and e-government solutions. Examples of existing multi-factor authentication solutions include requiring a user name-password pair, or the presence of a device such as a credit card and the knowledge of a PIN. One problem associated with these existing solutions is that they do not guarantee the presence of the owner of the card. Other manual-type arrangements include merchants requesting identification, such as a driver's license, to confirm the identity of the person using the card. Traditional access control schemes use names and passwords. Such systems are vulnerable to many known attacks such as replay and brute force attacks, as is well known.
The financial services industry has been deploying magnetic strip cards for many years. Magnetic strip cards together with a PIN build a two factor authentication system but can be cloned at a fairly low cost. The PIN can be obtained by deploying terminals or point of sales devices that have been tampered with to record the entered PIN. Instances of such abuse have been widely reported in the media.
Recently magnetic strip cards have begun to be phased out by major banks and credit card companies who have started the migration from magnetic stripe cards to chip and pin cards. Chip and pin cards provide a higher level of security because the knowledge of the credit card number, and other exposed credentials of the account and card holder is not sufficient to complete a transaction. The presence of the payment device such as a credit card equipped with a smart card chip is required.
Smart cards are tamper resistant computing devices that provide a secure environment for storing credentials and processing sensitive information. Traditionally, operating a smart card requires the knowledge of a 4 digit pin. Presenting a wrong pin to a smart card repeatedly causes the card to enter the “locked” state and to refuse to communicate with a terminal or card reader. In any event, the card can still be stolen, and used with knowledge of the associated pin. Using a pin has several disadvantages, including (1) a pin can be lost or forgotten, (2) the pin can be obtained from the card owner by force or theft, (3) a pin requires a keypad on the terminal, (4) it takes time to enter, and (5) is not practical if contact-less smart cards are used, because the time in which the card is in the vicinity of the reader may not be sufficient.
A common problem with all these prior art methods is that they do not ensure the presence of the user. Accordingly, there is a need in the art for improved authentication of card-based systems, such as card-based payment systems or card-based personal identification systems.